OHIO releases proposed budget reduction scenarios

Apr 29, 2011Pam Benoit and Stephen Golding

On Friday, Executive Vice President and Provost Pam Benoit and Vice President for Finance and Administration Stephen Golding sent a message to the entire OHIO community regarding the release of the proposed budget reduction scenarios.

Dear Ohio University Students, Faculty and Staff:

Following the release of the planning unit budget targets on April 8, we met with all of the planning unit heads to review their proposed reduction scenarios. Copies of those scenarios can be viewed on the Executive Vice President and Provost’s (EVPP) website, OAK ID and password required.

We want to acknowledge the work that deans, vice presidents, chairs, directors and budget unit managers put into developing the proposed scenarios.

Each scenario is a summary document. As a result, they do not fully capture the ways in which planning unit heads have worked with their stakeholders to align reductions with their long-range strategic plans. However, what should be evident is that units exhibited great resourcefulness and kept the needs of our students foremost in mind.

ERIP and VESP
Early Retirement Incentive Plans (ERIP) and Voluntary Employee Separation Plans (VESP) participation will result in scenario adjustments. A significant milestone in our understanding of buyout participation will be May 23. Ohio University employees who are eligible for the ERIP and VESP options and wish to receive the cash incentives must declare their intentions by that date.

Whether and how positions vacated by ERIP and VESP participants will be filled has been a subject of discussion. While some replacement hiring will be done to meet acute needs, most post-buyout hiring will be done in conjunction with a unit staffing plan that takes into account a multi-year budgeting environment based on Responsibility Centered Management (RCM) principles and planning unit strategic priorities, that prepares for the possibility of a continuing decline in state subsidy, and that incorporates new approaches that preserve quality and flexibility when it comes to fundamental university activities.
Non-Personnel Savings
During the course of the budget process, we have emphasized the pressing need to find ways to reduce our costs of doing business so that we can dedicate more funding to support our strategic priorities. Non-personnel cost-saving strategies form part of a number of the proposed scenarios but we can work together to realize more savings in this area. We will ask planning units to continue and in some cases to redouble their cost-saving efforts in the areas of purchasing, travel, utilities, and the fleet so that savings can be used to directly strengthen our institutional priorities.

Investments
Through the efforts of the University community we have demonstrated to the Board of Trustees that we can cover our budget deficit without having to raise tuition and fees. As a result, it is now possible to discuss with the Board the possibility of a modest increase in tuition and fees that would be used for strategic investments.

Some have suggested that the strategy of using a tuition increase only for strategic investments while requiring units to make cuts in their operating budgets is problematic. We understand this concern but at the same time it is important to recognize that reductions to operating budgets are unavoidable given the predicted economic circumstances of the next five years. If we do not pursue them this year, we will be forced to take them in subsequent years.

The types of strategic investments that we hope to make are designed to insulate the university against future downturns, to allow us to work on faculty and staff compensation, and to maintain student affordability. In order to realize a timely return on our investments we must make them now.

Any investments that we would pursue would align with our 4 x 4 strategic planning approach, which was outlined in a University message sent in December.

Likely investments would include scholarships; additional resources to enable the expansion and enhancement of our recruitment efforts; improvements in information technology that will provide better service to students, faculty, and staff and facilitate the development of quality multi-modal academic programs; fulfillment of the next stage of our commitment to the Bachelor of Science in Nursing program; immediate infrastructure needs; and the establishment of a Provost’s investment pool for academic initiatives that will allow us to help our students succeed academically and our faculty to develop their capacity as inspired teachers, researchers, and artists.

Next Stages
The next stage of the budget process is the open forums that will take place on May 2 from noon-1:30 p.m. in 024 Ellis Hall and May 4, 4-5:30 p.m. in 194 Clippinger (this forum will be webcast at http://streaming.cns.ohiou.edu/provost/ and questions can be sent to provost@ohio.edu). Members of the University community are encouraged to attend in order to provide input on the scenarios, to ask questions, and to provide any other feedback on the budget.

Input from the forums will be compiled and provided to President Roderick J. McDavis as he begins to shape his final budget recommendations to the Board of Trustees. Those recommendations will be presented to the university community on or before June 2.

The Board of Trustees will review and approve the budget for FY 2012 at their next meeting that will take place on June 23 and 24.